New Banking Charter Signals Trump Administration's Fintech Pivot as Crypto Card Service Collapses
The Office of the Comptroller of the Currency approved its first de novo bank charter under President Trump's second term, clearing Erebor to open for business on February 8th with a focus on AI, defense, and crypto clients—a sharp departure from the regulatory caution that defined the previous administration's approach to fintech banking.
The approval comes as the banking-as-a-service sector continues to shake out problem players. Just days before Erebor's launch, UnCash, a so-called "no KYC" crypto card service, abruptly shut down after what it described as a coordinated termination by its card issuers. The service blamed Mastercard for what it called a "clean, corporate guillotine," noting that 90% of its cards ran on the Mastercard network.
For CFOs navigating the evolving landscape of corporate banking and payment infrastructure, the divergent fates of these two ventures underscore a central tension: regulatory appetite for innovation is returning, but only for players willing to operate within established compliance frameworks.
Erebor, whose name references J.R.R. Tolkien's fictional dwarven kingdom in The Lord of the Rings, initially submitted its charter application in June 2025. The bank aims to serve high-net-worth individuals, startups, and businesses in AI, manufacturing, defense, and cryptocurrency, as well as payment service providers, investment funds, and trading firms. The positioning appears designed to capture market share left vacant after Silicon Valley Bank's 2023 collapse, which left many venture-backed companies scrambling for banking relationships.
The bank has attracted backing from well-connected figures in the current administration's orbit, including Palmer Luckey, founder of defense contractor Anduril, though the source material does not detail the full extent of these relationships or investment amounts.
UnCash's collapse, meanwhile, highlights the ongoing compliance crackdown in crypto-adjacent financial services. The service announced it would refund users and allow withdrawals to external crypto wallets, but its shutdown came just one day after being mentioned in a Fintech Business Weekly investigation into compliance gaps exploited by some crypto card programs. In its farewell statement, UnCash acknowledged the futility of its position: "We're done pretending we can fight Goliath with a slingshot made of good intentions."
The timing is notable. While Erebor's approval suggests the OCC is open to chartering banks serving crypto and emerging technology sectors, the simultaneous enforcement action against UnCash indicates that regulatory tolerance extends only to properly licensed and supervised institutions. For finance leaders evaluating banking partners or considering crypto payment infrastructure, the message is clear: the path forward requires full regulatory compliance, not workarounds.
The approval also raises questions about what comes next. If Erebor represents the first of multiple de novo charters aimed at underserved fintech sectors, corporate treasurers may soon have more options for banking relationships that understand their technology-forward business models. But the bar for entry—and survival—appears to be rising, not falling.
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